Tag Archives: defined contribution

Whether a Chief Financial Officer is running the fiscal operations of a hospital system, an insurance company or a company that simply employs individuals with health coverage, the decision-making process for sustainability is changing at a rapid pace. However, after years of hearing about reformation in the health system, broad, sweeping and revolutionary changes are finally happening. Major shifts are also occurring in the population, as well as technological advances that will disrupt the entire premise of a four-walled institution for care and the very model we use for health delivery.

You have too many beds.
While many hospital leaders won’t accept this at face value due to lengthy wait times, surgical demands and desire to shift beds, the truth is there are too many beds in a lot of hospitals. Between transferals to the outpatient setting and telemedicine, the need for expensive inpatient beds is declining. Additionally, hospital leadership are increasingly finding that they face problems with state authorities when they apply to move beds. Most recently at the University of Chicago, where 338 beds were being used for a 304-person utilization pattern, the state rejected a University application to move surgical beds.

More bodies in beds will never work again.
Value-based purchasing means that a warm body in a bed not only drives costs higher for the payer, but that the longer a patient remains in the hospital – or the more often they return – the more penalties that accrue. Therefore, the goal should not be for more bodies, but for cost-effective bodies. Depending on the community serviced, this can mean desire for more Masters Athletes, specialized services or elective services. Additionally, as we shift to a world where technology enables more clinical procedures and recovery to be done in the outpatient setting, or at home, and expensive inpatient procedures decrease in volume and reimbursements, hoping to fill beds is futile.

Alignment with physicians is nonnegotiable.No leader can effectively attain a goal without buy in from those who carry out the work. However, it is important to be aware that “physician alignment” is a term that causes almost all physicians to turn and walk the other direction out of fear that this indicates buying their autonomy and dictating their day-to-day, moment-to-moment ability to practice. According to Healthcare Financial News the implications of physician behavior are so important in 2014 that more revenue than ever will be spent recruiting physicians who see the world the same way you do, which is not very different from how corporation CFOs think about their employee hires.

As consumers take on more and more pay responsibility, unexpected payment shifts will keep occurring.
Many experts estimate that defined contribution, health insurance exchanges and the growing individual health insurance market means that patients will become more informed about spending their health care dollars, and therefore, more unwilling to spend. The future of reimbursements and pricing strategies is presently a puzzle wrapped in an enigma because of extreme uncertainty. However, it is general knowledge that Medicare and Medicaid reimbursements are going to continue decreasing, with the American Hospital Association and Moody’s already estimating an, “unequivocally negative” outlook for hospitals on the reimbursement fronts.

Technology and data utilization can save you money.
While the learning curve with new technology can be excruciating and the meaningful utilization of collected information seems daunting, everything from workflow to health activities and employee/patient engagement can be monitored – and altered in real time – using new technology. Moreover, the more information that is known today, the better predictive analytics and behavioral change that can be made tomorrow. However, as the amount of technology available to leadership continues to grow exponentially, the purchasing of new tech will be a balancing act between what is a passing fad versus what is sustainable and transferable.

With this economic opportunity in the market, it is imperative that health plans and enrollment become more tailored to individual and company needs, in addition to the one-size-fits-all solutions of the past and present.

Private health exchanges, according to bswift, like their new Springboard Marketplace, could be the platform to give consumers that greater choice and increase individual decision-making. Given that most large employers who are considering a defined contribution will remain self-insured, bswift is taking a calculated gamble that employers will continue to invest in cost management solutions such as incentives, wellness programs, consumerism as opposed to simply shifting costs to employees under the “fix it and forget it” cost sharing approach suggested by some competitors.

For those aware of bswift’s background as a tech company it may not be a surprise that the software and services offered are aimed at streamlining a very sophisticated system, and making the user experience easy. And for those that know the company’s Executive Director of Exchange Solutions Brad Wolfsen, the shopping experience and ease of transition into a new set of consumer options will easily resonate. Mr. Wolfsen, before joining the team, built and led Safeway’s wellness and retail strategy programs, and was the President of Safeway Health.

With a growing demand for health benefit options that resemble a choose your own adventure book, but with a set amount of money to spend, the development of software must also be functional for employers and employees. The Springboard Marketplace has been constructed so that functionality can simply be turned on and off, so that choices are simplified. Additionally, since there is not a standard approach to benefit choices and many legacy systems that have to be revamped due to mergers, acquisitions and partnerships, greater automation for employers means less paperwork for HR departments. By making workflow, reporting and administrative work more efficient through automation, cost-savings increase even further.

“The best and brightest clients are currently driving what is in the bswift system now,” says Mr. Wolfsen. “As we move towards expanding the suite of benefit options and meeting compliance standards, we are also investing in the shoppers experience.”

He, along with his colleagues at bswift, believe that their tech company is nimble in ways that others are not, and that with the help of their platform and Emma, more and more employers will begin the migration to defined contribution and private exchanges. If true, that growing shift could redefine how health benefit decision-making is done by employees in the future.